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Unformatted text preview: ees are encouraged to go
on sabbaticals 52
18 Early retirement is increased 5 46 3
0 29 11 43 Recruiting is cut back
The share of temporary employees is increased –15 48 19 63 Employees are laid oﬀ Head count –7 85 Employees are forced to take their vacations
Part-time work arrangements are increased –3 50 9 Pension plans are reduced –8 42 21 Base salaries are reduced Eﬀectiveness in
the average (%) 48
4 30 4 17
eﬀective Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA analysis. C P A Exhibit 14. Labor Cost Reduction Was Often Achieved by Reducing Head Count >40 In 48% of companies,
labor cost reduction
equaled head count
reduction In 34% of companies,
labor cost reduction was
head count reduction 1 21–40
1 1 3 4 11–20
in 2009 (%) 2 2 6 7 2 6 6 16 4 1 7 6 4 5–10 2–4 <2
<2 In 13% of companies,
labor cost reduction was
lower than head count
Head count reduction in 2009 (%) >40 Percentage of respondents
Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA analysis.
Note: Values below 1% not shown. similar approaches, such as communications programs,
underlines their importance. Using Effectiveness and Engagement to
Stay Lean and Become Flexible
During economic crises, low-performing companies react
by implementing a vast array of cutback and ﬂexibility
measures, relying heavily on the former. (See Exhibit 15.)
High-performing companies use a more selective and
balanced approach—which is better suited to sustaining
the strength of the workforce as a competitive diﬀerentiator.
These results underscore the importance of developing a
workforce strategy that can carry a company through
good times and bad. A critical task in developing such a
strategy is selecting which combination of workforce measures to implement, using two criteria: eﬀect on employee engagement and eﬀectiveness.
As a general principle, cutback measures are relatively
ineﬀective and erode employee engagement. By contrast,
ﬂexibility measures tend to be more eﬀective, and engagement is higher in companies that rely on them. Taking a closer look at the diﬀerences among the measures,
however, will help companies select the right mix.
Exhibit 16 organizes the measures according to their effectiveness and the employee engagement they foster.
The upper-right quadrant represents the ideal, including
relatively eﬀective measures that also drive the highest
engagement. Virtually all of the choices in this quadrant
are ﬂexibility measures: job mobility, streamlined processes,
tightened hiring criteria, and ﬂexible work arrangements.
(See the sidebar “KLM: Keeping the Family Together” for
an example of job mobility.) T B C G • W F P M A Exhibit 15. High-Performing Companies Are More Selective in Their Use of Specific
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This document was uploaded on 09/30/2013.
- Fall '13